Steinway & Sons: Buying a Legend
¢ñ. Statement of Problems and Issues
Summary
For 140 years, Steinway & Sons has set the standard for the quality manufacture of pianos. Why is Steinway legend? What made it so a great master? After first step into piano industry ¡°Steinway¡± and the word piano are almost synonymous. Working a long-term ¨C and still going- technical and market strategy that emphasized quality is to say, since the first Steinway family members arrived in New York from Germany in the middle of the 19th century, the company has pursued a strategy of making high-end quality product, selling them through its own sumptuous outlets and through a network of dealers, and gaining exposure by encouraging premier performing artists to use the pianos.
In the early 1970s, Steinway encountered competition from low-cost producers based on in Japan. While Steinway¡¯s fine image and reputation was unquestioned, the business wasn¡¯t particularly profitable. In addition to it, due to some stockholders who were unwilling to invest but mainly interested in income, Steinway¡¯s financial conditions became worse, so the family company came to an end, was sold to CBS. CBS recognized that the business didn¡¯t fit its corporate strategy. In 1985, CBS sold the company to John and Robert Birmingham, Boston-based investors. Under Birmingham, Steinway returned to its former stature, stressing quality and focusing on the high-end market. But ten years later, Steinway is also sold two investors, Kyle Kirkland and Dana Messina because of financial problems.
Problems and Issues
Now, the two young entrepreneurs have some questions and need to decide something important. Whether Steinway would continue its high-end quality piano or alternatively, pursue some bolder, more aggressive plan? Also they should decide what to do with the recently introduced line of Boston pianos. Did it make sense for Steinway to sell mid-priced pianos and how can they leverage the Steinway brand name to further enhance revenues? Finally, what role should they play in the running of Steinway?
We will mainly focus our analysis on the market share, financial problem and brand strategy. Now we start our analysis to choose the right creative to solve dilemmas which Kyle Kirkland and Dana Messina are facing.
¢ò. Analysis of Current Situation
1. External analysis: Market & competitor, Consumer behavior
Description
Market Industry Trends1. Sustaining downturn in the piano industry (global sales dropping by 40% since 1980)2. Consolidation of the piano manufacturing industries in US & EU3. Emergence of several Asian manufacturersThe Used Piano Market1. The impact by an active market for used pianos is considerable2.
The second part, “Why It Happened: Eighty-Five Years,” explains the origins of the firm and its founding and operating principles, and it sets the basics for why several deviations from these founding principles eventually led the firm astray.
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
In this paper I will discuss the Wrigley Company and how it became one of the most recognized and largest branded companies in the world. When you think of Wrigley people tend to think of the gum products it is now for, as well as the commercials we all have grown to love over the years. Remember the double mint twins, what about, Juicy fruit, even big red- all are a part of the every expanding brand of Wrigley. One of the many achievements the company can tip its hat too is being able to say that it lead all gross product sales in the year of 2007. This is a major accomplishment considering that the US is one of the largest consumers on the planet- so the competition is fierce. But overall its leadership and management have given the come the wherewithal to withstand to new challenges the company has faced over the decades.
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Schultz, Howard, and Joanne Gordon. Onward: How Starbucks Fought for Its Life Without Losing Its Soul. New York: Rodale, 2011. N. pag. Print.
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Nithin Geereddy. 2013. Strategic Analysis of Starbucks Corporation. [ONLINE] Available at:http://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf. [Accessed 18 April 14]
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